A common reason to create a family office is to perpetuate the family’s values. But how this works in practice can vary widely from family to family. For some families, the only direct connection to its values is through philanthropy, whereas other families also use their values to guide their investments.
“The values are a lens: Here are the things that are important to us,” says Betsey Fortlouis, executive director of InnerWill Leadership Institute.
Philanthropy is often the most straightforward way for families to express their values.
“Our values are the compass. Philanthropy is where my heart is — always has been. My father started that tradition, and we’ve carried it forward through the Pepin Family Foundation. With the family office, we’re expanding that reach,” says Tom Pepin, founder of the Pepin Family Office. “Health care, education and infrastructure have been our main pillars for decades, and more recently, we’ve added mental health and workforce development.”
These philanthropic endeavors help connect the family — and its values — to the community.
“We’re not just writing checks — we’re investing in the community we’ve been part of for generations,” Pepin says. “Whether it’s supporting frontline worker resiliency programs, helping USF nursing students build career paths, or investing in technology and programs that change lives, our money follows our mission. For more than five decades, our family has been proud to serve those who serve, and we remain committed to doing our part today and for generations to come.”
Celine Fitzgerald, a G3 member with Webb & O’Neill Capital, says “philanthropy is always a driver,” though her family has also experimented with other ways of expressing its values.
“We have dabbled in other avenues such as impact investing, but we aren’t able to make an impact as quickly, nor does it feel as personal,” says Fitzgerald, who is also president of the Fitzgerald Family Foundation.
For Patricia Saputo, CEO of her family’s office and co-founder of the advisory firm Crysalia, the goals of philanthropy and investments are separate.
“We’re not trying to tie our investments into the family’s values — that is seen more on the philanthropy side than in the day-to-day investment portfolio,” Saputo says. “We value what we value. But at the end of the day, what is the investment holding company there for? When we look at our investment policy statement, it’s more based on return and financial needs. We need a diversified portfolio.”
Still, the family’s values do have subtle effects on some of its investments.
“When we invest in real estate, for example, we may invest in affordable housing, but we still need industrial, commercial and residential, and to diversify in different geographies,” she says. “We may exclude specific industries — something to do with war, for example — from our investments, but beyond that, our values don’t affect our day-to-day investments.”
Using the family values as a guideline for philanthropy or impact investing can be a good way to unite the family around the family office’s work and to promote multigenerational engagement. But for this strategy to work, the values need to be defined in a way that everyone understands.
“It’s really important to define the values and the values behaviors: not just, ‘We care about family or faith or integrity,’ but what do our values actually look like in action?” Fortlouis says. “Values have to be more than just words.”
It can be particularly difficult to use values as a guide if those values came from one generation or one member of the family, without input from others.
“If you’re working in a family office and the values are just coming from the older generation and they haven’t really engaged other family members in evolving and living into the values, then it will be difficult for the entire family to use them as a lens to make decisions when it comes to things like investing or philanthropy,” Fortlouis says.
Peter Moustakerski, CEO of Family Office Exchange, says families are increasingly engaging in these discussions.
“There is a lot more forethought being given to the qualitative side of the family office,” Moustakerski says. “The conversation around values is front and center and is increasingly happening proactively ahead of time — instead of as an afterthought or only prompted by a major disruption or conflict within the family.”
And since family offices are generally set up to serve multiple generations, families need to consider what will happen if the family’s values shift — either because the family members change their priorities or because new family members take over.
“Values and what they represent might evolve a little bit. Businesses evolve, families evolve,” Fortlouis says.
For example, a grandfather may create a family foundation focused on education, but later generations may want to fund cancer research instead. The family may decide to rename the original foundation for the grandfather and let other family members pursue other interests. Of, if the family has articulated values that connect these issues, they may find a way to do both through the same vehicle.
“It’s a great opportunity to engage the younger generation: What are the causes that matter to them? How do they honor the things that were important to the founder’s generation as they evolve?” Fortlouis says. “How do they set a larger table, so that other members and branches of the family can feel engaged and see the impact of the family and the legacy?”
This engagement of the younger generation is tied to the sustainability of the family office.
“You may have a perfectly calibrated tax or investment management structure within the family office, but that doesn’t necessarily allow for the family members to be happy, engaged, fulfilled — and to want to be part of that structure. It’s a family office sustainability question, especially as the new generation steps in,” Moustakerski says. “Will they say, ‘Oh, that was my dad’s or my granddad’s office’? They don’t care as much about the technical solution. They care about: Will I feel heard and enabled to achieve what I want to achieve with the help of this office?”